With a traditional manual transmission, engine output is routed through a clutch mechanism to a geardrive assembly. However, in front of every automatic transmission sits a torque converter used to provide the transfer of power from the engine to the internal gearsets in the automatic transmission. The torque converter transfers this power through pressurized fluid flow.
The torque converter housing is bolted to a flexplate or flywheel attached to the rear of the engine crankshaft. Via fluid coupling, power is transmitted from inside the torque converter to a splined input shaft on the automatic transmission. The converter also serves as a torque multiplier (by a factor of 2 or more) as you accelerate from a standstill and allows the engine to idle in gear without moving. It also allows for smooth gearshifts and drivetrain slippage momentarily while gear changes are made without affecting vehicle speed.
This photo shows the torque converter after it has been sliced open. Pieces shown from left to right are: cover of housing, stator (top), turbine, and housing with impeller.
There are three major components within a torque converter: impeller, stator, and turbine. The housing bolts to the engine flexplate and provides an enclosed area for these parts to perform their fluid coupling function. The impeller, sometimes called the pump, is attached to one half of the housing. The turbine mates directly to the splined transmission input shaft. Inside each of these two pieces that face each other is a series of metal fins where the transmission fluid circulates. As the impeller spins, it directs fluid to the turbine, which also begins to spin and push fluid back toward the impeller.
In between the impeller and turbine lies the stator. The stator has the job of redirecting the fluid coming from the turbine such that it flows into the impeller in the same direction that the engine is rotating. This reverse operation helps assist the engine rotation. Within the stator is a one-way clutch that allows this action to complement engine rotation but freewheel as vehicle speed increases.
A torque converter housing is constructed from steel and must be very sturdy to withstand the forces and pressures involved in the fluid coupling process. | 
The impeller, or pump, is attached to the housing. It is in direct connection with the engine output. Inside the impeller is a series of fins which direct fluid flow from the outer set of fins toward the turbine's outer set of fins when the engine is spinning. | 
Here you can see the portion of the converter exterior that attaches to the flexplate on the rear of the engine. Usually three to four bolts or studs are used to mate the converter and flexplate. |